6-month non-repayment period after graduation · Federal: prime + 1% (currently ~6.45%) · Ontario: prime + 1% · RAP caps payments at 20% of income · Full repayment expected within 10 years (standard)
When OSAP Repayment Begins
OSAP repayment doesn't start the day you graduate. You have a 6-month non-repayment period — sometimes called the "grace period" — after you leave school full-time. During this period, you don't need to make payments, but federal interest begins accruing immediately on the Canada Student Loan portion.
At the end of the 6-month period, you begin making monthly payments on both your federal and provincial loan balance. These are typically consolidated and administered by the National Student Loans Service Centre (NSLSC).
Interest Rates on OSAP Loans (2026)
As of 2026, the interest structure on student loans is:
- Canada Student Loan: Prime rate + 1% (variable) or Prime + 2% (fixed). Current prime is approximately 5.45%, making variable rate ~6.45%.
- Ontario Student Loan: Approximately prime + 1% variable.
- Note: In 2023, the federal government eliminated interest on Canada Student Loans while you are in school and during the 6-month non-repayment period. However, interest still accrues post-repayment-period.
Repayment Assistance Plan (RAP)
If your monthly payment exceeds 20% of your gross monthly income, you may qualify for the federal Repayment Assistance Plan (RAP). RAP reduces your payment to an affordable level based on your income — and if you're earning below a certain threshold (approximately $25,000/year for a single person), your payments may be $0 while still making progress on your loan.
To apply for RAP: log in to the NSLSC online portal and apply annually — you must reapply each year to stay enrolled. The government covers your interest while you're on RAP so your balance doesn't grow.
Strategies to Pay Off OSAP Faster
- Lump-sum payments: You can make extra payments at any time without penalty, directly reducing your principal
- Bi-weekly payments: Switching from monthly to bi-weekly payments effectively makes 13 monthly payments per year, saving significant interest
- RRSP contribution room: Prioritize tax-deferred savings alongside loan repayment to reduce your taxable income and grow retirement assets simultaneously
- Claim the student loan interest tax credit: You can claim interest paid on student loans on your federal and provincial income tax return
Typical OSAP Debt at Graduation
| School | Avg. Loan at Graduation |
|---|---|
| UofT, Western, Queens (4 yr) | $25,000–$45,000 |
| McMaster, Waterloo (4–5 yr) | $15,000–$35,000 |
| QC universities (4 yr) | $8,000–$20,000 |
| MUN (4 yr, NL resident) | $5,000–$18,000 |
🧮 OSAP Repayment Calculator (calcOsapRepay2026)
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